Where is Spring?
So another 3 months have come and gone. Best meme I’ve seen
during that time was that of a ground hog on Ground Hog Day. He predicted an
early spring here in Calgary but looking closer, he was already experimenting
with the new government sold cannabis. Winter doesn’t look like it will let go
here across Canada. So how is this weather impacting the market? Typically the
market begins to move and get better as the grass pushes through the snow and
greens the landscape. Total sales are down year over year however prices are
relatively flat. CREB has stated the Benchmark price is down 0.17% from the
same time last year. Detached housing was up about ½ a percent while attached
dwellings were down about a 10th of a percent but apartments still
saw an almost 3% drop. Speaking to realtors and others in the market all
suggest the weather is having an impact on the market. Now not as much as you think
but enough for people to put off buying and selling decisions. Just like I want
to buy new sunglasses, the weather is making me rethink it and wanting to wait.
Hopefully with actual spring weather coming we will witness noticeable
growth, at least in activity. Just a couple reminders, the downtown condo
market is still sluggish. Currently in the downtown area there are 378
apartment listings and only 150 sales over the past 90 days or an inventory of
almost 6.5 months. This does not include new construction which may be equal or
more. Speaking to some people, they feel it may be up to a 10 year turn around
for the condo market to see reasonable growth again. This is mainly due to a
significant over supply and low demand.
Beware of Media
As mentioned, earlier, overall sales volume is down. Year
over year sales are down 22.76% in Calgary. Please note when the media reports
that, they are reporting volume and not values. There are many imputs as to why
volume may be down, which may be lower demand, non open market sales (new and
non arms length transactions) and the weather. A few years ago we saw a
significant drop in the mean values however benchmark values only fell
slightly. This was due to the previous year having record Million dollar sales
and few the next year. So when clients call panicking their values are
dropping, look at the benchmark values as they are a better indication of what
is happening.
For full Calgary market stats and information visit www.CREB.com
Reminders
As of January 2018, members of the Appraisal Institute of
Canada, which I am a member of, ALL appraisals must have the following
information included, the type of mortgage. Whether it is a 1st, 2nd
or other as well if it is conventional mortgage financing. This is to help mitigate
risk and fraud. Thus the appraisal will state if the appraisal is to be used
for 1st Mortgage/Conventional financing only. Please ensure that you
include that information is included in your request (if it is a mortgage
financing).
Also if you are unsure if a value will be met I am more than
willing to take a look at sales and listings and provide some feedback. As for
values, what I have found is 2018 assessments do appear to be slightly lower
give or take, for detached homes in the City of Calgary. In the outlining areas
they are still all over. If you just want a value to make some decisions, we
now have a program to help with that by using a “desktop” appraisal. If you
decide to proceed the fee would be applied to a full, meaning a discount on the
full.
Also remember there are still a few lenders you can order
direct to us. These include First National, RMG, MCAP, Optimum and a most
private lenders. I have also been informed that most other lenders will allow
non appraisal files, such as Schedule A’s, Market Rent Reports and completion
inspections, ordered directly. If you have a question or unsure, feel free to
contact me and I can help. If you have a lender you would like to use us for
but we are not on their “list” let us know and we will see what can be done to
be included. We are currently working on getting on Genworth and Home Trust’s
list.
I do handle all the NAS work for our office, including for
Scotia Mortgage. So if you have a file that has to go through NAS, if it is
directed to us, I would be the one doing it. For Scotia, you can choose the
appraiser.
Outlook
With the “spring” and summer months upon us, typically market
activity increases, including sales volume and in some cases values. However,
keep in mind, some segments may see greater activity than others. Overall, we
do not see any significant increase in property values and modest increases in
activity. One item to remember is, the foreclosure market is picking up. Over
the past 2 years lenders have been very lenient with mortgage arrears. Many
lenders have worked with borrowers, giving them more time, breaks, etc. They
remember what happened in 2009 when the market crashed and increased
foreclosures depressed the market even more. During those last 2 years, I have
seen less foreclosures than usual. However, recently we all have seen an
increase in these files. Our hope that while these increase, good work for us,
they will not impact the market significantly as they are sold off. We also may
see an increase in “out of province” investors. As governments in BC and
Ontario have cracked down on foreign buyers and “non-resident” owners, I have
seen a few come this way. So we must keep that in mind, how and if they will
impact the market as they have in other jurisdictions.
Again any questions feel free to contact us. We also do more
than just appraising. As members of RECA we must also follow new RMS rules and
can provide full property sketches, floor plans for you or your clients. Also if you are having a hard time with a
listing, we can help you properly market and prove values.
Thank you,
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